If you know that you need an auto loan with 600 credit score or lower, then you know that getting that loan might be a little difficult. You can minimize your chances of being rejected by following these four simple tips.
Check your credit report before shopping
When you are considered for an auto loan with bad credit, there are two major areas that a lender will look at: credit score and debt to credit ratio. Scoring poorly in either area can cost you percentage points. A poor score in both will probably result in a credit denial.
Get your credit in order
You can pull your own credit score for free once a year. A couple of months before shopping, request a copy so that you can correct any issues before you hit the car lots.
Improve your credit score if possible
Little things can help. Do not open new credit cards within 60 days of applying for bad credit auto loans. Lenders may think you needed that card to pay your monthly debts. Pay credit card balances down to less than 50% of the limit. The higher your score and the lower your debt/credit ratio, the better your interest rate will be.
Do not open or close a credit card prior to applying for a loan
If you open a credit line, it lowers your score for a short time. Closing a card raises your debt to credit ratio, and if you close your oldest card, it will shorten your credit experience.
Getting a 600 credit score auto loan is much harder to get, but, if you take care, one can still be obtained. Follow these tips and you can maximize your chances for approval and get the best interest rate possible.